It’s important to pay your car insurance premium on time so that your coverage stays active — but what if you simply forget to, or you can’t afford to make a payment one month? Most insurance companies have what’s called a car insurance grace period, that is, an amount of time after a payment’s due date in which you can still pay your missed premium before your company cancels your policy.
Most car insurance companies have a grace period of between 3 and 30 days. Nationwide, for example, gives drivers 3 to 5 days from their due date to pay their premium. Meanwhile, Allstate allows payments to roll over to the next month, but you’ll have to pay a late fee.
If your current policy is too expensive, you should shop around for new coverage; you may be able to find lower rates with a different company. Or you may be able to lower your coverage limits or raise your deductibles to make your premium more affordable. Some states also offer programs to help low-income drivers afford car insurance.
Whatever you decide to do, try avoiding a lapse in coverage. If you’re caught driving without insurance, you could be looking at more tickets, fees, and fines, not to mention the loss of your license. Plus, your rates will be even higher when you go to sign up for a new policy.
Car insurance grace periods by company
Grace periods differ across insurance companies — some companies give drivers as few as three days to pay their premium after a missed payment. Here’s what the grace period looks like at some major insurers:
Grace period (from due date)
You'll get a late fee and your missed payment will roll over to the next month
8 to 10 days
3 to 5 days
What is a car insurance grace period?
A car insurance grace period is the amount of time you have after a missed payment to pay your premium before your policy is canceled. Many car insurance companies offer grace periods of between 3 and 30 days after your missed payment, and they’re required to notify you before canceling your policy for nonpayment.
If you think you’re going to miss your next due date, you should reach out to your insurer to find out how long you have to pay it before your policy is canceled. Some insurance companies also offer payment plans that can help you keep your policy active.
If you miss a payment, you can still pay your premium within your carrier’s grace period to continue your coverage, but you may need to pay a late fee. If you miss your payment due date and the due date listed on your notice of cancellation, then you’ll risk losing coverage altogether.
Do all carriers offer a grace period?
While a lot of companies call it a grace period, it’s really just a period in which a payment must be made before your policy is canceled. Your insurance company is legally required to send you a notice of cancellation before canceling your policy due to nonpayment. The notice will include your last date of coverage, unless your payment is received before that date.
Can you use the grace period every month?
Technically speaking, you can use your grace period every month as long as you make a payment before your policy is set to be terminated. Once your policy has been terminated, it's up to your carrier to decide if they will reinstate your policy or not. Most carriers require you to pay a late fee for missed payments, but you can avoid these extra costs by paying on time.
What to do when your car insurance lapses
A coverage lapse is any period of time when your car is not covered by insurance. Coverage lapses can happen when your policy has been canceled and you don’t have another insurance policy in place.
If your coverage lapses but you want to stay with the same insurer, you can see if they will reinstate your policy, but this might require you to pay your missed payments and a reinstatement fee. You could also choose to shop around for car insurance with a different company. If you missed your payment because you weren’t able to afford it, you may be able to find the same coverage for a cheaper price elsewhere, or contact your state’s DMV to see if they have a program to help low-income drivers secure coverage.
➞ Learn more about car insurance coverage lapses
Ways to reduce your car insurance payments
If your car insurance premiums are consistently more than you can afford, there are ways to lower your rates, like:
1. Shop around and compare quotes
One of the best ways to save money on car insurance is to reshop yearly. By comparison shopping across multiple insurers, you might find a cheaper quote for the same coverage you have now.
There’s more than one way to shop around for car insurance: You can visit each insurance company's websites one-by-one and get quotes that way, or you can work with an independent broker, who will get you quotes from multiple companies and help you compare coverage options.
2. Look for discounts
Many insurance companies offer discounts that can lower your rates. But each insurance company offers slightly different discounts, so you should check with a representative at yours to see if they are any more available to you that you aren’t already getting. These are some of the most common ways to save:
Student discounts for full-time students who earn above a certain GPA
Driver’s education discounts for completing a drivers ed or defensive driving course
Discounts for being affiliated with certain groups, like the military
Safe driver discounts if you’ve gone a certain number of years without an accident or a claim
Low mileage discounts for spending less time on the road
Bundling discounts for purchasing car insurance along with a home or renters insurance policy from the same company
3. Lower your coverage limits or drop coverage
Another way to lower your rates is by lowering your coverage limits. It’s worth mentioning, however, that this might save you more on your premium, but you might not have all the coverage you need in the event of an accident.
You can also drop coverage you don’t need. A “full coverage” policy is one that includes comprehensive and collision coverage, in addition to liability. But comp and collision coverage are optional, and you can skip them if you want to lower your premiums, it will just mean that damage to your own vehicle won’t be covered.
4. Increase your deductible
You can also increase your comp or collision deductible, which can lower your rates. A deductible is the amount paid upfront per claim, and comprehensive and collision coverage both require deductibles. The higher you set your deductible, the lower your rates will be. And conversely, the lower you set your deductible, the higher your rates will be. Just keep in mind that you may actually need to pay this deductible some day, so it should be set to an amount that you can afford.